Upsizing the Rockingham Casino

The Eagle Tribune carried a story this week talking about Millennium Gaming’s plan to create a larger casino at Rockingham Park that would include restaurants and even a concert facility that would seat 1500. With the New Hampshire Senate having passed a casino bill (SB152) that makes licensing contingent on an investment of $425 million it might appear to some that the existing requirement would suffice to build a “destination” casino. But a look at the “fine print” of that bill has shown otherwise, as the $425 million requirement includes deductions for “land acquisition” and “infrastructure costs”, as well as a full deduction for the $80 million license fee. After deducting the $80 million the requirement comes down to $345 million, less land acquisition and infrastructure. In reality, under this legislation, the casino mandate could drop as low as $250 million, which would be no more than an expensive slots parlor. I have had Daniel Barrick, of the New Hampshire Center for Public Policy Studies on my WCAP Radio Program to talk about this issue, and what the size of a casino might mean for post-construction jobs. The report issued by the Center discussed the issue:

Current legislation (SB 152) requires a minimum $425 million investment. However, as detailed earlier, the $80m license fee can be subtracted from that amount, for a net minimum investment of $345 million. In addition, the legislation also allows developers to include the cost of purchasing or leasing land for the casino site in their total investment. But assuming a $345 million investment, we would expect to see approximately 1,700 jobs, according to the estimated relationship between investment and staffing. Whether these jobs are “new” jobs is a matter of debate. Economists have examined expanded gambling as an economic development strategy, as well as a state revenue generator. The Federal Reserve Bank of Boston was asked to study this question in 2006, and found that the local
economic benefit of having a casino is likely to be quite small, and depends almost entirely on whether the casino is truly attracting “new” economic activity into the local area surrounding the casino, beyond the goods and services demanded by the casino itself.

I also discussed the issue with Jim Rubens, the Chair of the Granite State Coalition Against Expanded Gambling, when he appeared on my show. Rubens highlighted the same issue, as well as a few others, in his appearance. With the investment requirement of SB152 clearly deficient Millennium has stepped up to answer the criticism by proposing the “upsize” highlighted in the Tribune story. The new number unveiled by Millennium is $600 million, with additions of a hotel, theater, and restaurants. Whether that $600 million is “casino investment”, or total investment, is not clear to me, although Millennium did a public presentation at Rockingham Park on the new plan. As you might expect Jim Rubens has criticized the new plan, but has also raised some important questions in a press release issued by the Granite State Coalition. From his press release:

Over the past two weeks, the special House casino committee has closely examined SB152, the casino bill written by lobbyists for Las Vegas-based Millennium Gaming. Skepticism about the bill among even pro-casino legislators has mounted to the point where Millennium is being forced to make yet loftier promises, today that it will spend $600 million on its proposed Salem casino.”Casino developers consistently overpromise delivery dates, casino amenities, tax revenue, and regulatory compliance to get casinos legalized and to win licenses,” said Jim Rubens, chair of Granite State Coalition Against Expanded Gambling. “If Millennium and its lobbyists want to overcome the skepticism, they should write the promises into their bill.”

So Rubens calls for SB152 to be amended to change the required investment to the $600 million, in line with the new Millennium commitment. But he also gets to that other key point: will the investment number be less the offsets allowed by SB152 (License fee, land acquisition, infrastructure)? From the Coalition press release:

…disclose the infrastructure and site acquisition cost deducts from the promised $600 million (Millennium paid $200 million for the derelict Meadows race track site)

There is political momentum with the pro-casino forces, who have won a local referendum in Salem, and have Governor Hassan pushing hard for this legislation. Despite that momentum passage in the New Hampshire House remains an open question, with the vote looking too close to call. If the pro-casino political operation that was surprised by the opposition of a sitting Attorney General of New Hampshire at the Senate hearing for SB152 is in charge of House passage then maybe the anti-casino forces have a real shot at victory. One thing we know for sure: There is no LBJ in that pro-casino group.

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